I’m seeing a neat double top pattern on Cable!
Will we see a break lower now that the U.K. printed mostly downbeat jobs data?
Before moving on, ICYMI, yesterday’s watchlist looked at AUD/USD’s short-term pullback ahead of the RBA minutes release. Be sure to check out if it’s still a valid play!
And now for the headlines that rocked the markets in the last trading sessions:
Fresh Market Headlines & Economic Data:
Canadian manufacturing sales slipped by 0.8% vs. projected 0.7% declineEmpire State manufacturing index tumbled from 11.1 to -31.3 vs. 5.1 forecast
PBoC lowered CNY reference rate at 6.7730 vs. consensus at 6.7763
Chinese state media: PBoC moves suggest more stimulus needed
Japanese tertiary industry activity fell by 0.2% vs. expected 0.3% gain
U.K. average earnings index up by 5.1% vs. 4.5% forecast, 6.4% previous
U.K. claimant count fell by 10.5K vs. estimated 32K decline
U.K. jobless rate unchanged at 3.8% as expected
Upcoming Potential Catalysts on the Forex Economic Calendar:
Canadian inflation numbers at 12:30 pm GMT
U.S. building permits and housing starts at 12:30 pm GMT
U.S. industrial production data at 1:15 pm GMT
Iran nuclear deal negotiations ongoing
New Zealand GDT dairy auction coming up
New Zealand quarterly PPI at 10:45 PM GMT
Use our new Currency Heat Map to quickly see a visual overview of the forex market’s price action! 🔥 🗺️
What to Watch: GBP/USD
Heads up, pound traders!
We’ve got a double top pattern on the 4-hour time frame of GBP/USD, and it looks like a neckline breakdown is possible.After all, the U.K. just printed a smaller than expected reduction in unemployment, as the claimant count for July fell by 10.5K versus the projected 32K drop.
If risk-off flows carry on for the rest of the trading sessions, the safe-haven dollar might be able to take advantage and sustain a selloff for the pair.
So far this week, downbeat data from China and PBoC policy actions are keeping investors jittery about a global recession.
Watch out for candles closing below the 1.2050 minor psychological mark since this might confirm that a downtrend of the same height as the reversal pattern is due. That’s nearly 250 pips yo!
Technical indicators are still pointing to a possible return in bullish pressure, as Stochastic is already reflecting oversold conditions while the 100 SMA remains above the 200 SMA.
If the neckline holds as support, Cable might still be able to bounce back to the tops around 1.2250 or higher.
Better watch out for headlines that could impact market sentiment in the next few hours then!